Infrastructure growth slips in July; Govt disappointed
Indian infrastructure sectors' gallop reduced to a trot in July, compounding the government's disappointment with a slowdown in industrial production that signals a moderation in the country's overall economic growth.
By PTI |
NEW DELHI: Indian infrastructure sectors' gallop reduced to a trot in July, compounding the government's disappointment with a slowdown in industrial production that signals a moderation in the country's overall economic growth.
The growth of six core infrastructure sectors, which contribute slightly more than a quarter to industrial output, fell sharply to 6.3 per cent in July from 10.9 per cent in the year-ago month. Cumulative performance during April-July also dipped to 6.1 per cent from 8.7 per cent in the same period of the last fiscal, according to official data released on Thursday.
All six sectors - cement, steel, coal, power, crude oil and petroleum refining - recorded a slower growth during the month as higher interest rates curbed demand for manufactured goods like automobiles and consumer durables, besides housing and commercial real estate. The performance of infrastructure sectors merely mirrors the huge fall in industrial output - from 13.2 per cent in July 2006 to 7.1 per cent in July 2007.
"The IIP (Index of Industrial Production) figures for July are disappointing," Finance Minister P Chidambaran told reporters here, but hoped demand will pick up once the festival season kicks off later this month.
Crude petroleum showed a negative growth of 0.9 per cent in July as against 4.10 per cent. Coal put up a dismal show, dropping to 1.1 per cent from 9.1 per cent. Finished steel's growth was almost halved to 7.9 per cent from 15 per cent. The six sectors carry a 26.7 per cent weightage on the IIP.
"Contraction in credit has achieved the purpose of controlling inflation but now we should ensure that growth is not impacted," Commerce and Industry Minister Kamal Nath said.
He said the Reserve Bank should revise the monetary policy and ensure that credit contraction does not lead to decline in industrial growth.
The growth of six core infrastructure sectors, which contribute slightly more than a quarter to industrial output, fell sharply to 6.3 per cent in July from 10.9 per cent in the year-ago month. Cumulative performance during April-July also dipped to 6.1 per cent from 8.7 per cent in the same period of the last fiscal, according to official data released on Thursday.
All six sectors - cement, steel, coal, power, crude oil and petroleum refining - recorded a slower growth during the month as higher interest rates curbed demand for manufactured goods like automobiles and consumer durables, besides housing and commercial real estate. The performance of infrastructure sectors merely mirrors the huge fall in industrial output - from 13.2 per cent in July 2006 to 7.1 per cent in July 2007.
"The IIP (Index of Industrial Production) figures for July are disappointing," Finance Minister P Chidambaran told reporters here, but hoped demand will pick up once the festival season kicks off later this month.
Crude petroleum showed a negative growth of 0.9 per cent in July as against 4.10 per cent. Coal put up a dismal show, dropping to 1.1 per cent from 9.1 per cent. Finished steel's growth was almost halved to 7.9 per cent from 15 per cent. The six sectors carry a 26.7 per cent weightage on the IIP.
"Contraction in credit has achieved the purpose of controlling inflation but now we should ensure that growth is not impacted," Commerce and Industry Minister Kamal Nath said.
ADVERTISEMENT
He said the Reserve Bank should revise the monetary policy and ensure that credit contraction does not lead to decline in industrial growth.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
